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Unformatted text preview: explain whether this makes sense or not. 2. A $1 per pack increase in the federal tax on cigarettes has been proposed as a method of discouraging smoking by teenagers. Some statistical estimates suggest that a 10 percent increase in the price of cigarettes causes teenagers to reduce their demand for cigarettes by 13 percent. Compute the price elasticity of demand for cigarettes among teenagers. Is this elastic or inelastic?...
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- Spring '11